Pa. Fire Dept. Finds Itself in Dire Financial Difficulty

April 04--Butler Township supervisors want to meet with Valley Regional Fire and Rescue before agreeing to take on a more-than-$400,000 loan to pay off the company's debts.

Supervisors discussed a proposed agreement with the fire company during a work session Monday morning. The fire company owes about $422,000 in real property and fire equipment loans to various banks and another $150,000 in outstanding accounts payable, according to Maryanne Petrilla, township manager.

"The fire company situation is serious; however, I believe, the supervisors have a good plan in place to get back on track," she said Tuesday. "They are not in jeopardy of ceasing operation but they need to do something quickly to get their financial house in order."

The plan the supervisors are considering involves the township taking out a general obligation note to cover the $422,000 in loans, Petrilla said. The township will hold liens on all fire company property and equipment until the note is paid, she said.

The township plans to pay interest only on the note for the first two years, allowing the fire company to use funds from the fire tax to pay down the $150,000 it would still owe, Petrilla said.

Afterward, the township would use half of the fire tax to pay the note and the fire company would use the remainder for annual operating expenses, she said.

"This would give the fire company very little for operating expenses," Petrilla said.

The supervisors also asked the fire company for a list of equipment that can be liquidated, she said. Petrilla noted they were close to an agreement, and wanted to know if the supervisors wanted to ensure liquidation funds would be applied to the debt or allowed into the fire company accounts, as little remains for operations without fundraisers, such as "boot drives."

Supervisor Ransom Young felt the fire company should be coming to them with more information to move the process along.

Petrilla, who found out about the fire company's situation soon after returning to the township manager position earlier this year, noted the financial situation is dire.

"The bank is going to pull away with some fire trucks soon," she said.

The township still needs information, such as lists of bills and an operations plan, Young said.

"There are a lot of blanks that they have to fill in so we can move forward," he said. "We want to see a business plan to see how they're going to operate."

Young noted that the workman's compensation insurance will also come out of the remaining funds used to operate. Petrilla said that amounts to about $20,000, being paid out half of the $105,000 in taxes allocated to the fire company.

"They're not going to get anything (to operate)," Supervisor Brian Kisenwether said.

Solicitor Donald Karpowich wondered if the fire company would close down the ambulance service, if it can't afford to continue the service.

Kisenwether noted the township needs to decide what services it wants to keep for the community, and suggested they send a letter to the fire company.

Young suggested they come to supervisor work session and "hammer this out."

Rich Bognar, Valley Regional fire chief, and Dave Stirling, the fire company association's president, could not be reached for comment.

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